Quiz | February 2010
HOW SAFE IS YOUR MONEY?
Most people know that the Federal Deposit Insurance Corporation guarantees depositors' cash should a bank fail. But for how much? And for which accounts? Are your deposits protected?
Here are ten questions to see how well you understand FDIC insurance. We've updated the deposit insurance increases with the passage of the $700 billion federal financial rescue plan.
By Joan Goldwasser & Amy Pollak
Here are ten questions to see how well you understand FDIC insurance. We've updated the deposit insurance increases with the passage of the $700 billion federal financial rescue plan.
By Joan Goldwasser & Amy Pollak
Quiz
HOW SAFE IS YOUR MONEY?
Question 1 of 10
I am single, and have my checking and savings accounts in one bank. What is the maximum amount of insurance on the money in my accounts?
A. $50,000
B. $100,000
C. $250,000
D. $500,000
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Quiz
HOW SAFE IS YOUR MONEY?
Question 1 of 10
I am single, and have my checking and savings accounts in one bank. What is the maximum amount of insurance on the money in my accounts?
You're right! C. $250,000 is correct.
Sorry, wrong!
is incorrect.
The right answer is C. $250,000.
All accounts held in a single name at one bank are added together, and $250,000 per depositor is insured by the FDIC. So you could have a $100,000 certificate of deposit, $75,000 in a bank money-market account and $75,000 in a checking account, all of which would be insured. But any excess over $250,000 in those combined accounts isn't covered.
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HOW SAFE IS YOUR MONEY?
Question 2 of 10
I have accounts in my name at five different banks. I am insured for $1,250,000.
A. True
B. False
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Quiz
HOW SAFE IS YOUR MONEY?
Question 2 of 10
I have accounts in my name at five different banks. I am insured for $1,250,000.
You're right! A. True is correct.
Sorry, wrong!
is incorrect.
The right answer is A. True.
FDIC insurance is $250,000 per depositor per insured bank. Thus, you can have $250,000 deposited in each of five different banks and all of your funds would be covered.
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HOW SAFE IS YOUR MONEY?
Question 3 of 10
I have a joint account with my spouse, plus I have individual account at the same bank but my spouse does not. How much insurance do we have as a couple?
A. $100,000
B. $250,000
C. $750,000
D. $1 million
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HOW SAFE IS YOUR MONEY?
Question 3 of 10
I have a joint account with my spouse, plus I have individual account at the same bank but my spouse does not. How much insurance do we have as a couple?
You're right! C. $750,000 is correct.
Sorry, wrong!
is incorrect.
The right answer is C. $750,000.
Your joint account is insured for $500,000 -- $250,000 worth of coverage for you and your spouse. Your individual account is also insured up to an additional $250,000.
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Quiz
HOW SAFE IS YOUR MONEY?
Question 4 of 10
My IRA is at my bank. It is not covered by FDIC insurance.
A. True
B. False
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HOW SAFE IS YOUR MONEY?
Question 4 of 10
My IRA is at my bank. It is not covered by FDIC insurance.
You're right! B. False is correct.
Sorry, wrong!
is incorrect.
The right answer is B. False.
Certain types of retirement accounts at banks are covered by FDIC insurance, including IRAs, Roth IRAs, and SEP IRAs.
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HOW SAFE IS YOUR MONEY?
Question 5 of 10
What is the maximum coverage for my retirement accounts at an FDIC-insured bank?
A. $100,000
B. $150,000
C. $250,000
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HOW SAFE IS YOUR MONEY?
Question 5 of 10
What is the maximum coverage for my retirement accounts at an FDIC-insured bank?
You're right! C. $250,000 is correct.
Sorry, wrong!
is incorrect.
The right answer is C. $250,000.
All deposits in any of these retirement accounts are added together and insured up to $250,000. So if you have a regular IRA and a Roth IRA, the assets would be added together and insured up to $250,000.
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HOW SAFE IS YOUR MONEY?
Question 6 of 10
What is the maximum amount of coverage for a family of four if the parents have two individual accounts, a joint account, trust accounts for each child and each other (a total of six), and two retirement accounts at a single institution?
A. $400,000
B. $750,000
C. $1 million
D. $3 million
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HOW SAFE IS YOUR MONEY?
Question 6 of 10
What is the maximum amount of coverage for a family of four if the parents have two individual accounts, a joint account, trust accounts for each child and each other (a total of six), and two retirement accounts at a single institution?
You're right! D. $3 million is correct.
Sorry, wrong!
is incorrect.
The right answer is D. $3 million.
Here's the math: Each parent's individual account is covered up to $250,000, plus a joint account worth $500,000. Each parent has a trust account for each child, plus another trust with the spouse as beneficiary. That's a total of six trust accounts, each of which is covered up to $250,000. Finally, each parent has an IRA that's insured up to $250,000. Use EDIE, the Electronic Deposit Insurance Estimator, on the FDIC Web site, www.fdic.gov, to figure out your own situation.
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Quiz
HOW SAFE IS YOUR MONEY?
Question 7 of 10
I have an account at a federal credit union. It is insured, too, right?
A. True
B. False
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HOW SAFE IS YOUR MONEY?
Question 7 of 10
I have an account at a federal credit union. It is insured, too, right?
You're right! A. True is correct.
Sorry, wrong!
is incorrect.
The right answer is A. True.
Credit union accounts are insured by the National Credit Union Share Insurance Fund (NCUSIF), which is also backed by the full faith and credit of the U.S. government. Coverage is very similar to the FDIC, insuring up to $250,000 for individual accounts. A joint account that is owned by two persons has an additional $500,000 worth of coverage. Trust accounts have separate coverage, too. Use the Share Insurance Estimator at the National Credit Union Administration Web site, www.ncua.gov, to figure out if your accounts are insured.
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HOW SAFE IS YOUR MONEY?
Question 8 of 10
My retirement account is at a credit union. It's not insured?
A. True
B. False
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HOW SAFE IS YOUR MONEY?
Question 8 of 10
My retirement account is at a credit union. It's not insured?
You're right! B. False is correct.
Sorry, wrong!
is incorrect.
The right answer is B. False.
No worries. The insurance for retirement accounts held at credit unions is more generous than the FDIC insurance. If you share a regular share (checking) account, an IRA and a Keogh at the same credit union, the NCUSIF insures the regular share account for up to $250,000, the IRA for up to an additional $250,000 and the Keogh for up to an additional $250,000.
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Quiz
HOW SAFE IS YOUR MONEY?
Question 9 of 10
If the FDIC takes over my bank, it will be weeks before I receive my money.
A. True
B. False
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HOW SAFE IS YOUR MONEY?
Question 9 of 10
If the FDIC takes over my bank, it will be weeks before I receive my money.
You're right! B. False is correct.
Sorry, wrong!
is incorrect.
The right answer is B. False.
You are likely to have access to all of your insured funds within a few days. You may have immediate access through your ATM or debit card, and have complete access within two or three days.
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Quiz
HOW SAFE IS YOUR MONEY?
Question 10 of 10
I have more money in my account than FDIC insurance covers. I will lose everything over $250,000 if the bank fails.
A. True
B. False
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HOW SAFE IS YOUR MONEY?
Question 10 of 10
I have more money in my account than FDIC insurance covers. I will lose everything over $250,000 if the bank fails.
You're right! B. False is correct.
Sorry, wrong!
is incorrect.
The right answer is B. False.
You are likely to receive a portion of your funds as the FDIC sells the bank's assets. Depositors historically receive 72% of their uninsured funds, and it can take 3 to 5 years to collect the total amount.
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HOW SAFE IS YOUR MONEY?
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